Investing on land or offshore in New Zealand: biotechnology versus an NZOFC
New Zealand is a democratic English-speaking country in the British Commonwealth. It has a free market economy, political stability, a world-class educational system, and strong research, business, and entrepreneurial communities. New Zealand offers the foreign investor the opportunity to make attractive land investments and a legal vehicle to operate a New Zealand offshore finance company, an NZOFC, off its shores. New Zealand land investments can be traded locally or linked to New Zealand’s healthy export economy. Offshore investments in New Zealand will take advantage of business opportunities and what are essentially bank clients around the world, but not domestically.
New Zealand is located in the South and Western Pacific Ocean on two large islands. The majority of New Zealand residents are of European descent and by far the most widely spoken language is English. It is a developed country with high international rankings in economic freedom, lack of corruption and education. International surveys of the world’s most livable cities always see New Zealand’s urban areas at or near the top of the list. Her heritage from the British Empire is still evidenced by the fact that her head of state is Elizabeth II, the Queen of England. The queen is represented by the Governor General, but administrative power rests with the New Zealand Cabinet.
New Zealand is well known in the business world for having a culture of innovation and a stable political environment, especially when it comes to doing business. New Zealand ranks high in ease of doing business surveys. The various factors combine to make New Zealand a great place to invest. Specifically, there are a number of business areas in which New Zealand excels. It deals with biotechnology and agricultural technology, creative activities such as digital and creative arts, fashion design, publications, textiles and digital content.
Specialty manufacturing thrives in New Zealand with companies specializing in cleantech, defense, light and heavy engineering, plastics, composites, and metals technologies. Much of this stems from the country’s strong educational and research base.
An economic strength of New Zealand is its food and beverage industry that has tripled its exports in the last two decades. Its technical strength is shown in its computer and software industry. New Zealand deals with wireless infrastructure, health information technology, transportation, logistics and supply chain management technology, and communications technology with geospatial applications.
With a healthy environment and large forests, New Zealand has a thriving export business for timber and other forest products. The other aspect of New Zealand’s healthy environment and natural beauty is that the country is a tourist destination that attracts more than two million visitors a year and billions of dollars of tourists.
During the wave of deregulation that hit many developed countries during the 1980s, New Zealand developed consulting services to help adapt to the business and social environment. These consulting services are especially useful for those who wish to invest in land in New Zealand from established and offshore businesses licensed and based there. Whether investing in world-class biotech research targeting genomics, breeding, cloning, or molecular techniques aimed at improving animal productivity, there is a local industry in New Zealand ready to assist the interested investor.
For those interested in doing business internationally but with New Zealand as a base, there is a particularly attractive option. It is the bank that is not a bank. This is a New Zealand Offshore Finance Company, an NZOFC. This type of operation can take interest-bearing deposits, make loans, offer credit and debit card services, provide fiduciary services, and much more. An NZOFC can effectively function as an offshore bank. However, it cannot operate in New Zealand. Furthermore, because it is governed by a different set of laws than banks, it cannot be called a bank. An attractive aspect of an NZOFC is that it has no capital requirements and is not subject to regulation by the Central Bank of New Zealand.
A useful tip for investors is that companies doing business in New Zealand are often subject to tax. However, a New Zealand special purpose company that is an offshore company may be constituted as a trustee of a non-resident New Zealand trust. This type of offshore business arrangement is not taxable in New Zealand, except to the extent that the proceeds are earned in the country of New Zealand.
As with many offshore company setups, an international trading company outside of New Zealand will typically do business around the world, maintain bank accounts, and invest anywhere outside of New Zealand. Such a business will be a tax-free offshore company.
Once incorporated, the company is generally free to do business, open bank accounts, or invest anywhere in the world. If a business wants to take advantage of the type of asset protection features that are often available abroad, it is helpful to combine the business with a trust.
If an investor is interested in the bank that is not a bank, that is, a New Zealand offshore finance company, such an institution can be licensed and formed by anyone, regardless of nationality. Directors do not need to be New Zealand residents, although it is not uncommon for an NZOFC to have at least one shareholder, officer or manager who is a resident of New Zealand just because there can be, at times, issues that can be more easily handled by someone physically. present in the country.
When investing in New Zealand or choosing to license an offshore company in New Zealand, the investor will typically want to see what business opportunities are available both at home and abroad. To the extent that the tax advantages or privacy and asset protection features of an offshore company are important, the directors of a company can choose a complete “offshore” route. To the extent that the business opportunity in the country of New Zealand is attractive, directors may seek advice on investment opportunities in the country rather than abroad.